What is Bankruptcy?
Bankruptcy is a legal process that assists individuals or businesses eliminate their existing debt or pay off a portion of it with the protection of bankruptcy court. The idea behind bankruptcy is to allow the person filing to escape the overwhelming debt they already have and give them the opportunity for a fresh financial start. An Ocala bankruptcy attorney can help you determine whether bankruptcy is the right option for you and help you through the process.
There are two different kinds of bankruptcy that allow people to do this. There is Chapter 7 bankruptcy, the “liquidation” bankruptcy, and there is chapter 13 bankruptcy, the “reorganization” bankruptcy
Chapter 7 Bankruptcy
Chapter 7 bankruptcy in Ocala is the liquidation kind of bankruptcy, which means that your non-exempt property will be sold and the proceeds will be used to pay off all or some of your debt. You get to keep any exempt items identified by the state of Florida; exempt property includes one car, tools and equipment needed for work, clothing, and other household furnishings. You can expect your home, boats, and extra vehicles to be sold under chapter 7 bankruptcy. Any money that is owed on secured debt, which is debt with an asset pledged as a guaranteed payment, can be paid off in a lump sum, continue to make payments, or hand over the asset pledged to the lender to settle the debt. Filing for chapter 7 bankruptcy typically lasts between three and six months.
Your eligibility for chapter 7 is based largely in part to your income. If your income is below the median household income in your state or is not high enough to cover a repayment plan, than you qualify for chapter 7. (You can take the Means Test to determine your eligibility) If your income is too high to qualify for a chapter 7, then you may qualify to file chapter 13.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy in Ocala is a restructuring of your debt for a three to five period of time in order to pay off some of the debt. Your lender and you will discuss terms to a repayment plan and at the end of that plan the remainder of your outstanding debt will be forgiven. You must have sufficient income in order take on the additional responsibility of paying back your delinquent debt payments as well as current payments, so a significant amount of disposable income is needed to file chapter 13. In order to qualify for chapter 13 bankruptcy you must earn more than the median household income in your state and have no more than $1,010,650 in secured debt and $336,900 in unsecured debt. Any secured debts you have are allowed the option for made up delinquent payments to avoid repossession or foreclosure on that property, which can be included in the chapter 13 repayment plan.
If you are receiving harassing phone calls from your creditors, missing payments on your mortgage or other bills, or are overwhelmed by your debt than you should meet with an experienced Ocala bankruptcy attorney to discuss your options. Call (888) 316-2131 today to schedule your free consultation today.